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The two main reasons why organisations should look to manage their software assets are compliance and cash. Indeed, avoiding a jail sentence or a hefty fine is often the reason that most companies make software licensing compliance a priority. Yet a survey conducted by the Federation Against Software Theft (FAST) Corporate Services found that 41 per cent of UK businesses could also be wasting thousands of pounds through over-licensing their software and not having measures in place to manage applications on the network.

IT auditEvery business knows exactly how many company cars it owns yet many do not have an accurate picture of how many PCs or software licences it has. Businesses need to recognise the fact that this area is just as valuable as fleet vehicles and other more tangible assets. Software licences are often regarded as intangible assets unlike other items owned by the business.

Undertaking an audit will not only ensure that all software present on company PCs and other hardware such as PDAs is licensed and legal, but having greater visibility of what is on the system could result in redeployment of software assets and cash channelled into other areas of the business.

Money down the drainFAST’s own experience suggests that when most companies conduct a software audit they are actually over-licensed and sometimes by as much as five to ten per cent. The main reason for over-licensing is that most companies simply do not know how many licences they actually require and therefore spend years over-buying licences that do not coincide with the needs of the business, just to avoid operating illegally. This process can then snowball and result in organisations having a huge surplus of licences that they do not use or need.

Businesses need to implement the correct procurement procedures and controls in order to avoid overspending and to remain in charge of their software assets. Carefully reading licence terms and conditions before purchasing can save a business money as, for instance, some publishers may state that for every ten licences you get one free, so a business of 50 employees will only need to buy 45 licences.

Who needs the licence?Over-licensing occurs because many IT managers deploy a standard suite of software across the whole organisation even to employees that do not require certain packages, simply because it is easier to support and should make light work of any software licensing concerns. However, in many organisations the end-user will alter the standard desktop by personalising it in some way to the point that there is often no consistency amongst users and therefore it is no easier to support.

Some companies provide access to all software applications regardless of whether each individual needs them. For example, the accounts department is unlikely to ever use PowerPoint; likewise a company director will not use the marketing team’s design software. In these cases, redundant software should be uninstalled to avoid wastingmoney on over-licensing. If a business purchases a licence for every desktop andhalf of the business does not use a particular package then it is automatically throwing money down the drain.

Unused licencesSoftware that sits on the shelf because it is inappropriate, unusable or there is a lack of knowledge regarding its use, is the most expensive as the licence remains unused. Licences can also be made redundant when users leave the company or move to a different department. In some cases PCs may have been retired yet the organisation may still be paying support fees for the software that ran on those machines.

This means that many companies are paying for maintenance on software that isn’t needed anymore. In fact it can cost as much as 20 per cent of the purchase price to maintain software each year, so if you don’t use it, uninstall it and store it. Besides, the product can always be reinstated if it is required in the future.

Legal complianceWhilst the business benefits of effective software asset management are often anchored around a drive to save money, the threat of facing a jail sentence for not having licences in place should also set alarm bells ringing. Most people wouldn’t watch TV or drive without a licence - so why are so many businesses, from large corporates to SMEs, using software without one?

The answer in the majority of cases is ignorance. But, as software publishers crack down on piracy, businesses would do well to remember that ignorance is no defence in a court of law. Many company directors are still unaware that they face uncapped fines and up to ten years imprisonment for software theft as stated in the Copyright Designs and Patents Act 1988 (section 107).

Even when a case is not pursued in court, an out of court settlement could damage a company’s reputation not to mention its bottom line. Improving asset management can therefore be a relatively simple process and can result in huge cost savings and legal compliance.

Setting boundariesThe first step towards improving the management of assets is to ensure that the appropriate policies and procedures are implemented so that employees know what they can and can’t do. Just as there is no point in mopping the flood when the taps are still running, doing a software audit is pointless without first telling staff what they may and may not do.

Ensuring that all staff know the business risks involved and the consequences they face if found to not be adhering to company policy, is vital to facilitate software licensing compliance. Every member of staff should sign a document to say that they have read and understood the policies and procedures which have been put in place.

Users should be made aware of new policies and procedures; this can be done via posters, newsletters and notice boards. A disciplinary process should also provide reinforcement, and should be followed if staff are found to be contravening the new policies and procedures.

Getting your house in orderThe audit process needn’t be a daunting task, and once in place will pay dividends for the organisation. The process will provide a record of all software assets to find out exactly what is already installed and, more importantly, what is actually used.

The audit process can either be done using an electronic network auditing tool or via a manual walk-round audit. There are advantages and disadvantages to both, and it may also depend upon the size of the organisation and how many PCs it owns.

Collecting data via an electronic tool is much quicker, but it is practically impossible to obtain all the information required for the audit. Information on the user – name, department, physical location etc. – as well as details of stand-alone PCs or laptops that may be off-site cannot be collected via an electronic audit.

A physical walk-round is very time-consuming, but ensures that these details are not left out of the audit. It also takes into account peripherals such as printers, plasma screens, scanners and external modems.

Ensuring complianceThe third step in the process is reconciliation of the audited assets with relevant software licences, to ensure that the organisation is correctly licensed. An asset register should be devised, listing the unique asset number identified during the audit process with the licence number. Many software publishers allow invoices to be used as proof of licence purchase, so it is worth reconciling software to invoice numbers as backup.

The organisation should then ensure it has the correct number of licences. This is likely to involve purchasing licences for software that is underlicensed and deleting any unlicensed software that is not needed.

Ongoing managementThe last, and perhaps most difficult task is the ongoing management of the compliance programme. Policies and procedures should be reviewed frequently and updated as necessary, with regular communication sent out to all staff to remind them of their existence. A full audit should be carried out at least once a year as well as an interim audit every quarter of between five and ten per cent of the organisation’s PCs. This will ensure that the organisation is as compliant as it can be.

Although the process seems simple and many businesses audit their own software, they do so without the experience and expertise of carrying out an effective asset management project, and may find themselves with useless outdated information – wasting both time and money. For these reasons many companies seek the advice of experts who can run the audit and reconciliation on their behalf - leaving the companies to get on with running the business and be safe in the knowledge they are legally compliant and won’t be wasting money.For more informationFor further information on these and other software licensing issues, please contact FAST Corporate Services on 01628 622 121 or go to www.fastcorporateservices.com